Obama is bluffing. He so desperately wants to keep spending at high levels and to increase taxes that he is threatening to withhold social security checks from recipients.

Republicans should take a reasonsble deal if it is available. A structure of scaling back spending, even if not what we would want, without tax increases is a deal worth taking.

But running up another $2.5 trillion in national debt without any constraints on spending is not worth it. Something has to give, and as Obama says, if not now, when?

Call his bluff, while being willing to take a reasonable deal of spending constraints and no tax increases. But…

If Obama is so hot not to pay social security checks even though there will be enough money on hand to pay those checks, and all other essentials including payments due on the national debt, then let him do it. Because he won’t.

The real question isn’t whether $2.45 trillion is worth giving Obama the rope to hang himself. What we should be discussing is what would happen if the US did default on its debt. That is where we are heading if we don’t do something now. So why not risk forcing Obama into a corner by refusing to sign on to a bad deal? Wouldn’t it better to go into that kind of default where it was due to one rogue and irresponsible president than to kick the can down the road and end up defaulting on our debt because our entire government is irresponsible? The damage from the former would be very bad for sure but a rogue president is much more fixable than a hopelessly irresponsible establishment and the markets would treat the former better than the latter. That may very well be the choice before us given how bad our entrenched criminal class of elected weasel is proving itself to be.

The time is now. We need to know if our government is in fact determined to destroy the economy on its way to a global government. We don’t need slick partisan tactics designed to weld the blame onto the other party as we head into yet another election season. We need to start solving problems now. Start with the very big ones.

No matter how this plays out, each side will try to blame the other for any problems, real or imagined. That is unavoidable. So, Republicans not only must think about what’s best for the Country in the short term, but how do they achieve the goals of reduced spending and a booming economy. To reduce spending and get the economy going, Obama and the Democrats must be defeated; to do that, the Republicans must win this battle politically. If that means raising the debt limit without much in the way of spending reductions, that’s what should be done.

I can see merit in McConnell’s proposal. Another approach would be a small increase in the debt limit along with equal cuts in spending. Both of these will be unpopular with Democrats, however, because they don’t want to face this problem again before elections. That’s a good reason for Republicans to try for it.

Bill Crystal has some interesting plans: http://tinyurl.com/6fjt5bk
It involves allowing a debt ceiling increase that is acceptable to Republicans with zero Republican votes, it might be one of the best ideas to get us though 2012.

That plan is just as bad as McConnell’s for the same reasons. It’s just another way to surrender you right to vote to block a bad plan while immunizing Republicans from blame.

We (Tea Party) did not elect Republicans last November to punt or avoid blame. We elected them to save the country from disaster before it’s too late. All they seem to come with are dubious plans to save their own skins while the country goes over the cliff.

If they don’t want to vote for fear of being seen to be mean, step down and let those with spine do it. They are wasting space.

I encourage everyone to read Niall Ferguson’s “The Ascent of Money”. It was written in 2008 before all of this QE nonsense started but anticipated a global crisis due to the foolish assumption of Chimerica being a symbiotic relationship. The book ends on the thinly veiled question of whether this is going to end in world war.

Every time I here our “betters” dismissing the loss of reserve currency status for the US dollar by casually describing a “smooth transition”, I want to scream. There has NEVER been a smooth transition when the status quo is smacked by that kind of a sledge hammer. The transitional period between the British sterling and the US dollar took place between 1914 and 1948 when we smoothly absorbed two world wars and suffered well over 100 million deaths.

All financial models fall apart once the big players refuse to reset their books to the reality. The world is awash with so much debt that most of us will be impoverished forever. At what point does the shooting start? It’s not the Tea Party types who start these wars, it’s the banks and their big customers.

Question: can the House propose and vote on a resolution that will guarantee that, if a default were to occur, the interest payments are made first; then priorities for payment are to be followed? Social Security, military pay, unemployment and Medicare payments will be paid FIRST, in the resolution; all other obligations will be prioritized by the executive, using a standard of “fully dependent on entitlements promised by the Federal Government to the poor, elderly, and unemployed to be paid first” or some such language?

Such a House resolution will put the Republicans on record as NOT wanting the poor and needy, those dependent on federal funds, to be “shot hostages”, as Erik Erikson says over at Red State.

It could be proposed as a Senate resolution, too.

Voting on such a resolution will reveal, by their votes, who is willing to take down the poor, the elderly, the needy for political purposes. On record. Cannot be refuted. Not even questioned. This could be very powerful to have on record for the election, as well.

This type of resolution will also outline to that the president has legal GUIDELINES for prioritizing any payments, should there be a default. (Let’s face it, if the debt limit has been raised 10 times in 10 years, then this will come up again.) And, should default come, there needs to be priorities in place. And then the EXECUTIVE would be solely one responsible if the poor and elderly are cut, or the military and the unemployed.

Such a resolution will put the executive at a disadvantage. If he does not follow these simple guidelines, he will be hurting Americans – and be accountable for it. Demagoguing the issue, taking the elderly or the poor hostage as a “weapon” (how despicable is that, anyway?!), will be taken from him. At least in any rational, believable context.

Yes, they can. In fact, I believe they’re planning to. Of course, it’d have to get passed by the Senate and signed by Obama…

Even so, it’d be worth doing: House Repubs would be on record with a bill stating what they think the spending priorities should be in the event of a partial shutdown. At least they’d be able to point to it as a rebuttal when the Dems and the media (I know, I repeat myself) demagogue with the scare grandma routine.

The problem is Obama is *not* bluffing, he has no problem with creating a massive budgetary train wreck complete with Greek debt chorus and party hats, he has every belief that he can spin the disaster into another game of “Blame the Republican”, just like he has done every other time he has gotten into trouble. And he has the full force of the Media, the Unions, and the Party behind him.

Or so he thinks. The Media has already started to crumble, the Unions parasites are realizing they are killing their hosts, and the Democrats are quietly thinking about a certain Sec. of State for 2012.

I agree that he’s not bluffing; he has shown a remarkable capacity for coming out smelling like a rose no matter what disaster he’s provoked, but just because the media is not doing so hot doesn’t mean they won’t try to cover for him, and doesn’t mean they won’t be successful at it.

At this point I would be making sure that he’s legal obligated an accountable for paying the governmental obligations, and not able to wiggle out of it just to provoke a crisis. He’s not one to let that opportunity go to waste.

I agree. That is what makes the situation so dangerous for Republicans and for the country if Obama gets a second term. Republicans must play this carefully and be smart about it. They must recognize the possibility that they won’t achieve their objectives in this round.

They still have opportunities through appropriations bills, although these don’t affect entitlements. Entitlement reform may have to wait until we have a Republican President and Senate.

Am I wrong here, but aren’t SS & SSDI checks received in the mail or direct deposited on the 1st of the month not the 3rd? That’s when my neighbor gets hers. She says that if the 1st is a weekend or federal holiday, she gets her check on the day before. So why was the question asked about August 3rd?

Wouldn’t sending out a letter to recipients amount to the same thing as halting the checks? Can he legally order the head of SS to send a notice, when payment is guaranteed by the government? Can the SSA refuse to send a letter stating as such?

This is a case of Blind Man’s Bluff on the part of Obama. Threaten seniors with the loss of the benefits they purchased over their lifetimes to scare them. Why didn’t Obama say “Well, if we don’t raise the debt limit, there will be no foreign aid money to send to Haiti, no $5 billin in aid for Brazilian oil exploration, no money to reimburse hospitals for emergency room care for illegals, on and on.”

But he didn’t say that, did he? No, he choose to threaten those that are merely surviving on a benefit that has not kept up with inflation.

Want to reduce the deficit? Reduce unemployment insurance to a certain level. Make it just like any insurance policy that has benefit limits. If you purchase a $250K life insurance policy, you know when you die your family will get $250K no matter what the economy is.

How about we lay off for six months all those that work for the Department of Education? Or the Department of Agriculture which are agencies that should fall to the states?

How about we fire all the czars, half of Michelle Antoinette’s staff, limit the miles Obama can put on AF1, set the thermostate in the White House 5 degrees higher, limit the amount of money Obama can spend on parties in the White House (that averaged one every three days in his first year in office), and go through the alphabet agencies of the federal government with a red pen?

He’s not bluffing. He’s playing politics with people’s lives. As usual. He wants to stop ss checks . . . as long as he can blame republicans. He has zero interest in or concern for the people this would affect. We know, and he knows, that his policies are essentially decimating the middle classes, bankrupting the country, and destroying our standing in the world (economically and in every other way). He counts this as success.

If you think he’s bluffing, you’re not paying attention. BO is an ideologue. He literally does not give a darn whom he hurts, whom he destroys, as long as he sees it as a step toward his fundamentally transformed America, that utopia he and his lunatic fringe have been dreaming about for decades (despite the consistent failures of all of their policies).

Social Security would be 2nd, actually, after interest on the debt. You don’t screw with the bond markets and you don’t risk the government’s AAA rating on its debt. If the rating goes down, interest goes back up to where it averaged just a decade ago and we find ourselves paying $500 billion in interest per year instead of the $200 Billion we’re paying now.

Armageddon will be heralded by the bond markets. This is why Bernanke is already considering QE3 (one branch of government printing money to buy bonds from another branch of government) – he’s scared to death of an honest attempt to sell bonds on the open market. China’s been selling, Japan holding, Russia is selling and the big bond funds are either selling or already sold. The biggest buyer of US debt has been the US government. A bond auction without the US Government doing most of the buying would almost certainly result in higher interest on the debt.

Yesterday, I heard an American president tell little old ladies that all of the money that their families had been forced – in good faith, mind you – to give to the government for decades not only wasn’t THEIRS, it also wasn’t THERE.

I’ve NEVER heard any politician admit this – and Obama did it because he is a political lightweight….

Tina Korbe, a relatively new contributor at HotAir, has embedded a video of Congressional questioning by Kansas Republican Representative Tim Huelskamp of Stephen Goss, the chief actuary for the Social Security Administration, on the specific question of exactly whose call it would be to “stop” making payments of SSI benefits, and why.

SHORT ANSWER: The Treasury Department. And the actuary explains why in general terms.

So you are right. Any such move would be directly be pinned on the politicos at Treasury, under orders of Obama.

He clarified not only that Obama was lying about not being able to send out checks but also the fact that Social Security can effectively raise cash even if revenues don’t cover expenses.

Here’s how: That Social Security “Trust Fund” is basically a pile of IOU’s in the form of a ‘bond’ that’s not really a bond (they aren’t backed by the full faith and credit of the government, but that’s not important here), the important thing is that there’s a few trillion dollars worth of them that count against the debt ceiling. To cash them in, they send the ‘bond’ to Treasury for cash, which Treasury doesn’t have, but in cashing in this ‘bond’ they lower the amount of debt the government has outstanding. Treasury can then issue a new, real, bond to the public in exchange for cash it can use to cash Social Security checks. Its a 1:1 deal, for every $1 in trust fund ‘bonds’ cashed in at Treasury, Treasury can issue $1 in real bonds to the public for cash without having any effect on the total debt the government owes.

Typically, they only cash in Trust Fund ‘bonds’ in an amount equal to the shortfall in the funding of Social Security (it turned a profit every year until last year and is expected to be about $40 billion short this year, so normally they’d cash in somewhere between $3 – $4 billion this August). However, if there is a partial shutdown due to failure to raise the debt ceiling, don’t be surprised if they cash in these bonds to pay the entire month’s worth of Social Security (about $50 billion for August) – since this will allow them to actually raise that full $50 Billion or so in cash by selling new bonds without exceeding the debt ceiling. Obama/Geithner are unscrupulous enough to even go beyond this and cash in more of the Trust Fund than they’re paying out to Social Security in order to not have to cut discretionary spending.

House Republicans should stop talking to Obama and simply pass a bill.

Pass a bill in the House that raises the debt ceiling by say $2 Trillion and cuts spending by an equal amount over 10 years. Real cuts – the kind that lower baseline discretionary spending starting next year and therefore result in a lower baseline for every year after. Note that Obama increased discretionary spending by over 70% in his first year in office as a ‘temporary’ measure to stimulate the economy (or so they said) – that ‘temporary’ spending is now considered baseline. House Repubs could take the last Bush budget, adjust for inflation (there hasn’t really been any), and use that as a baseline. That alone would likely net them $2 Trillion over 10 years in ‘savings’. Note that these would be Washington DC savings, in other words: not increasing spending as much as is currently planned. But, still, it’d be FAR cheaper than anything the Dems are trying to do.

Then, send the bill to the Senate and sit back and watch the circus. Any pressure from Obama or the press can be easily rebuffed: “We’ve already passed a bill to raise the debt ceiling, the ball is in Harry Reid’s court. Nothing can happen now until the Senate passes a bill of their own.” This will force the Senate Dems to actually put forward a bill.

Senate Dems will then do 1 of 3 things:

1) Fail to pass, or even put forward, a bill of their own. This would result in a partial government shutdown that is Senate Dems fault alone (note, there’s zero chance of a ‘default’ – anyone that says otherwise is a LIAR or completely ignorant of what will happen. There’s also zero chance that they won’t continue to pay out social security, medicare, medicaid and “essential” military spending).
2) Pass a bill identical to the House bill and send it to Obama (there’s no chance of this happening either, if you think otherwise you haven’t been watching Harry Reid operate).
3) Pass a different bill than the House, which also raises the debt ceiling. This bill could be VERY different from the House bill, but would allow the process to move forward. The House and Senate each send a group to Conference to reconcile the bills behind closed doors – this is where a deal can be made. Note that Obama is still out of the loop. Once a deal is reached, both houses have to vote on the changed bill (this is usually a formality as the leadership of both parties by this point are whipping their parties to pass the deal they’ve already struck).

Finally, it goes to Obama to sign or veto. If he signs, credit for the deal goes to House and Senate leadership (well, the media will credit Obama – but the pushback will be solid: he wasn’t in the room, this wasn’t his deal). If he vetoes, then the partial shutdown will be owned by him personally.

Frankly, I don’t see why House Republicans are negotiating with Obama at all. The media will give all credit to Obama and all blame to House Repubs, and there’s almost no chance of getting a decent deal. The credit to Obama by the Socialist Press will help his re-election chances. They have a far better chance of getting a decent deal in a closed door Conference Committee negotiation with Senate Dems – at least they’ll have a solid starting point to negotiate since both the House and Senate will have passed bills, Obama refuses to clarify his position – and keeps moving the goal posts – he’ll never write down a word, much less put his position in legislative language. Even if none of that is true, and I’m dead wrong (I’m not), they’d at least be forcing Senate Dems to actually advance a bill on their own, in writing, which they are loath to do.